Innovations In The Radio Industry

In the past five years, radio has been on a roller coaster of profits and losses. With the digital world entering the age of streaming content, radio’s future has not looked promising for the past few years, and it almost seems as if the radio was left behind when digital media took off. Just 12 months ago, radio experienced its largest quarterly revenue gain since 2000, growing 8% to $4.5 billion in the second quarter of 2010. In fact, the first quarter of 2010 was up a combined 6%, from the first yearly increase since 2007.

Despite the promising numbers, radio’s recovery is slowing down to a sluggish pace. Revenue increased by only 1% in the second quarter this year. According to the Radio Advertising Bureau, radio revenue increased 2% from the first half in 2011 to reach a total of $8.36 billion. The reasonable explanation for this decline is advertisers have slowed down purchasing air time, right…? This much is true. Key advertisers such as retailers and foreign auto brands curbed purchasing, thinking about foreseeable economic challenges. Despite the drop in retailers and foreign auto companies, clients such as Beachbody (makers of P90x), invest tens of millions of dollars into radio as a way to compliment TV spending.

It’s not simply the economic hardships that are curtailing radio’s overall leaps and bounds… Innovations in the radio/media streaming industry also play a large roll in determining radio’s success and increase in audience numbers. Online radio listener-ship has increased tremendously. Popular online streaming service, Pandora, is delivering solid numbers in the top 10 markets among listeners 18-34 years of age. In New York, Pandora has amassed a 0.7 AQH Rating (Average Quarter-Hour), which takes the average number of persons listening to a particular station for at least five minutes during a 15-minute period, and is an estimate of the population being measured. This 0.7 AQH Rating rating appears in the younger demographic, beating out traditional, terrestrial radio stations, Z100 and Hot 97. Now… The strong numbers do not mean advertisers will drop radio like a bad habit and begin to throw money at Pandora… Pandora is simply is personal jukebox, with no DJs, and no on-air personalities, which are fundamental to gaining the trust of the audiences.

In addition to Pandora, Spotify is another music streaming site that has attracted a large amount of online attention due to its recent release (July 2011). Similar to Pandora, users can register for free accounts, which are paid for by visual and radio-style advertising, or they can pay for an account without ads. What makes Spotify different than Pandora is that the paid account allows higher bit-rate streams and offline access to music.

Another innovation that is drawing audiences away from traditional radio, is the sparkling new, Turntable.fm. Turntable is a site where users are in control of the music they play. What makes Turntable an innovative website is that users can enter “chat rooms”, where are there are five DJ positions waiting to be filled. As long as you have another person on the DJ stand with you, you can trade off songs (either from your personal collection or from Turntable’s own collection). The site is still in Beta, and there are no advertisements yet. But like any website, once it finds a viable way to make money, it will. According to the Wall Street Journal…

“Turntable.fm uses a content server called MediaNet to stream the music, and it currently operates under something called the Digital Millennium Copyright Act, or DMCA — the same rights Pandora exercises. Basically, this puts some restrictions on Turntable — like playing more than three songs from one album — but, for now, it is a way to stream single tracks without having deals in place with music publishers.”

Turntable is actually a very cool and interesting place to be. As the electronic/dance music sensation sweeps in the nation, a majority of the chat rooms are occupied with users spinning anything from Kaskade to their homemade mixes. I am sticking with Turntable and will continue to follow its progress, simply because I believe it to be the closest to radio of the two previous sites. Turntable allows the DJs to interact with the users inhabiting a chat room while they provide feedback and entertain each other.

Radio has stiff competition. Sites such as Turntable, Spotify and Pandora do pose a threat… But in the meantime, advertisers still see radio as a viable medium to sell through and reach large audiences. Radio has the advantage of live on-air personalities, which I believe will win advertisers over when it comes to advertising on innovative sites such like Turntable, Spotify and Pandora.

Voice-Tracking & The Radio Industry

Voice-tracking is nothing new to the radio industry. Programmers have been including prerecorded spots and liners since the syndication of shows. However, stations have started using voice-tracking to cut the costs of marinating an on-air staff to see to the control board and run live shows. Instead, programmers will have either a single person, or multiple people – depends on what program is being recorded – come in and prerecord the specific program or several programs. What the station will then do is either save these programs to air throughout the next few weeks, or send the shows to different radio stations in different markets with different formats. This is controversial because there are jobs being lost on both end of the spectrum here

The issue of voice-tracking runs deeper than just the loss of jobs. Part of the audience experience of listening to radio involves feeling connected by the local sound of the on-air host. Allen Shaw, the vice chairman of Beasley Broadcast Group, which owns forty-five stations and is in the top ten radio markets in the nation, feels that there will be a backlash against the practicing of voice-tracking.

Radio audiences need that feeling of connectedness, if the radio format is not appealing to them, the on-air host can still provide entertainment.  An on-air host the can provide the dynamic entertainment that captures listeners makes a show more than just a collection of songs. With voice-tracking, the radio industry is avoiding taking risks by cutting lively DJs and now the industry has ended up with an unvarying product.

An example of voice-tracking be used to its fullest would be through the industry giant, Clear Channel Communications Incorporated. A Boise station, KISS 103.3 (KSAS—FM) is just one of Clear Channel’s efforts to create a nationally recognized “KISS” brand, where the promotional bits and logos are the same. Not only does Clear Channel have similar promotional aspects for these “KISS” stations, they also draw from the same talent pool. The industry was able take advantage of monopolizing smaller stations across the nation due to a 1996 law that eliminated the nationwide ownership cap of forty stations. The law also allowed companies to own as many as eight stations in the largest markets, double the previous limit.

Chicago natives - Look familiar?

As Clear Channel moves to extend its reach, it is running against the traditional way of operating within the radio industry. While Clear Channel was intent on creating a nationally recognized brand based on a federal trademark it has had to mount legal challenges in several markets, chasing off stations that had been using versions of the KISS name locally. Clear Channel is facing objections from union locals representing on-air talent, which likely stand to lose jobs as the company phases towards voice-tracking.

When a station employs the technique of voice-tracking, it significantly reduces costs for a station, and broadcasting, like any business, needs to be profitable and efficient. Unlike other businesses, though, broadcasters acquired their distribution mechanism—the public airwaves—from the government without any expenditure of capital. . The quid pro quo for that is that broadcast stations are expected to serve the public interest in local communities.

When a station uses voice-tracking to eliminate local employees in order to be cost efficient, the local community can be hurt altogether. The motivation to use voice-tracking is purely economics, by prerecording shows in advance and editing in music and commercials at a later point in time, the station drastically cuts costs. Homogenized voice-tracked formats, though, have not attracted very many new listeners in the largest markets and Clear Channel’s practices have drawn the attention of legal expenses and fines.

The question now is – How does radio accumulate the funds to prevent the continual use of voice-tracking? Two massive consumer research companies, Arbitron and Jacobs Media, which collect listener data on radio audiences, concluded in a study that radio listening is affected by Smartphone activity, so it’s pertinent that the industry adopts a mobile presence. More often than not, people with Smartphones are able access the Internet for news, entertainment and networking.

Maintaining a presence on the Internet is going to be extremely important for the radio industry in order to be profitable. Radio stations have the opportunity to create applications that would give Smartphone users the ability to listen anywhere, at any time. This would potentially increase the audience, which in turn would increase advertisers interest in advertising with the station. Besides mobile applications, radio stations must see the importance in the power of social networking sites. To be active on Facebook or Twitter opens the door for self-promotion and the ability to reach vast amounts of people very easily.

Radio is in trouble… But it is not a dead medium. Andrew Hampp, a writer who covers radio, cable TV and out-of-home advertising for Advertising Age, a website and magazine delivering news, analysis and data on marketing and media states that radio is still a growing industry.

 

“239 million people ages twelve and up listen at least once a week, which is four million more than radio’s weekly audience in 2009, a sign that the oldest broadcast medium is still finding new listeners”. Arbitron recorded that 190 million persons ages twelve or older heard at least one radio commercial a week. Radio needs to make this information available to advertisers to prove that radio is not a dead industry.

Despite the negative press radio regarding it’s fading power as a medium of communication and entertainment. I still have hope in the radio industry. National Public Radio has survived multiple attacks from the government threatening to cut funding, and yet manages to stay successful and popular. Commercial Radio is in the middle of a slump and needs to boost sales and rely not only upon the listening community, but the station staffs to be involved in the community and increase the individual station’s visibility. I personally am fond of the idea of radio adopting a mobile presence. In the foreseeable future, that’s where the growth will be. Support your local commercial, and public radio stations by tuning in and visiting their individual websites and see what they have going on in the community.

 

Twitter’s Effect on @Sprentice28

In a world where hundreds of social media sites have revolutionized how humans interact, there is one popular site that stands out to me – Twitter. Twitter is a social networking site, a source for news, and to many, a major distraction. Twitter is an entire world composed of Tweets, 140-character bursts of information. A Tweet is comprised of text, embedded media, anything you want! I wouldn’t go as far as saying Twitter has revolutionized how I live my day-to-day life… However, it certainly has put a spin on how I interact with the rest of the Internet and how I perceive my own words and recognize the impact they could potentially have.

Before I discovered Twitter, I was using “status updates” on Facebook. I perceived those to be something that merited an important message to be shared with all of my Facebook friends. In Twitter’s case, Tweets are little thoughts that are sent so frequently and contain anything you want. When I realized that Twitter users Tweeted so rapidly, I knew this was a place I could share my opinion as often as I wanted. Twitter is my outlet to voice my opinions without actually having to voice them. In the real world, more often than not, I tend to keep my opinions to myself. But on Twitter, I am able to Tweet my mind and if other users are interested, they choose to follow me. It is my choice whether I want to follow a Twitter account and receive that user’s ideas, or a company and receive Tweets containing exclusive offers. It’s my choice, and Twitter puts the users in charge.

Twitter allows me to interact with the rest of the Internet in ways I never thought possible. Before Twitter, I would go to companies’ individual websites and peruse the content, whether it was Mashable, Ralph Lauren, or Kanye West’s site. With Twitter, I can be connected to all things I am interested in, simply by looking at my Twitter Timeline. As Biz Stone, co-founder of Twitter said during his visit to Ball State in September of 2010, “You don’t need to Tweet to gain value from Twitter. You get real-time updates from the people and things that are important to you.” I am able to gain value from Twitter not only by Tweeting, but also by receiving information from the things I care about. Hip-hop icon MC Hammer had a few choice thoughts on Twitter…

“The platform offers celebrity brands the means to build and develop relationships in an intimate and personal way. The friendly and efficient interface links to video and audio and integrates with various other social media outlets with ease. That means my brand can live on a wide variety of platforms where fans might find me.” (Hammer, “It’s Twitter Time”).                                             Like MC Hammer, I’m able to stay updated with the people, brands, and companies that matter to me. While I don’t consider myself celebrity status (yet), I still think it’s important to market yourself to other followers as well as to potential employers.

Finally, as a full-time student whose interests lie in the world of future full-time employment… It is extremely important to me that I censor my Tweets so potential employers can do a background check on my Twitter account, and recognize that my Twitter profile is appropriate and will not give the company or brand a bad name. I hear more and more stories about employees losing their jobs over pictures on Facebook and even inappropriate Tweets…

“One Twitter user posted an update saying, “Cisco just offered me a job! Now I just have to weigh the utility of a fatty paycheck against the daily commute to San Jose and hating the work.” A Cisco employee responded, “Who is the hiring manager? I’m sure they would love to know that you will hate the work. We here at Cisco are versed in the Web.” “ (Fahmy, “Professor Suspended After Joke About Killing Students on Facebook”). Stories like this are reason enough to believe that employers regularly check social networking sites for content that is damaging to the company’s image. Censoring my Tweets doesn’t hurt when Human Resources pulls up my Twitter page and sees my content is appropriate.

Overall, Twitter has allowed me to stay connected to friends, bands, and companies I care about in a way that’s simple and a way I’m comfortable with. Gone are the days when I need to visit CNN Tech (I still do from time to time for other articles) to read the headlines, for there’s CNN Tech’s Tweet about the latest tech-related news on my Twitter Timeline. Twitter can be an extremely relevant and interesting place to be, only if you choose to make it so.

Shameless Plug: @Sprentice28

Works Cited

Fahmy, Dalia. (2010, March 3). “Professor Suspended After Joke About Killing Students on Facebook. ABC News. September 7, 2011.http://abcnews.go.com/Business/PersonalFinance/facebook-firings-employees-online-vents-twitter-postings-cost/story?id=9986796

Hammer, M.C. “It’s Twitter Time” MediaWeek (2009): Communications & Mass Media Complete. EBSCO. Web. 7 September 2011.

First Post – 8/31/2011

For “iCom 101: The Digital Word” course, I am maintaing a blog where I can post assignments and share my opinion on topics given in class. I recently had to follow a few leaders in the digital world on Twitter… As a regular Tweeter, this was no problem for me. The individuals I followed are as follows…

Walt Mossberg – (@waltmossberg) – Creator of the weekly Personal Technology column in the The Wall Street Journal. He also operates his website, allthingsd.com where he shares his opinion on technology.

Pete Cashmore – (@mashable) – Founder and CEO of Mashable, the most popular website for digital, social media, and technology news.

Nick Bilton – (@nickbilton) – Lead Technology Reporter for The New York Times “Bits Blog”.

If you’re interested in following more technology/media related people/sites on Twitter, I recommend Chris Anderson (@TEDchris), who is the curator for the TED conference and Tweets articles relating to technology as well as technology-related TED talks. CNN Tech News (@cnntech) is another page worth following if interested in staying up to date and reading stories about technology.

Until next time,

Stuart